Micro Chapter 12

question

Industrial Organization

answer

the study of how firm's decisions about prices and quantities depend on the market decisions they face

question

Profit =

answer

total revenue - total cost

question

Explicit costs

answer

input costs that require an outlay of money by the firm

question

Implicit costs

answer

input costs that do not require an outlay of money by the firm

question

Financial capital invested is an

answer

opportunity cost

question

Economic Profit

answer

includes implicit costs into formula

question

Accounting Profit

answer

just the profit formula

question

Production Function

answer

the relationship between the quantity of inputs used to make a good and the quantity of output of that good

question

Marginal Product

answer

the increase in output that arises from an additional unit of input

question

Diminishing Marginal Product

answer

the property whereby the marginal product of an input declines as the quantity of the input increases

question

Total Cost Curve

answer

graph of the relationship between quantity produced and the total cost; with each additional unit, the total cost increases exponentially

question

Fixed costs

answer

costs that do not vary with the quantity of output produced

question

Variable Costs

answer

costs that vary with the quantity of output produced

question

Average Total Cost

answer

total cost/quantity of output

question

Average Fixed Cost

answer

fixed cost / quantity of output

question

Average Variable Cost

answer

variable cos / quantity of output

question

Marginal Cost

answer

change in total cost / change in quantity

question

Efficient Scale

answer

the quantity of output that minimizes ATC

question

The marginal cost cruve crosses the average cost curve at

answer

its minimum

question

Economies of Scale

answer

when long-run ATC falls as the Q of output increases

question

Diseconomies of Scale

answer

when long-run ATC rises as the Q of output increases

question

Constant returns to scale

answer

when long-run ATC doesn't change with Q

1 of 22

question

Industrial Organization

answer

the study of how firm's decisions about prices and quantities depend on the market decisions they face

question

Profit =

answer

total revenue - total cost

question

Explicit costs

answer

input costs that require an outlay of money by the firm

question

Implicit costs

answer

input costs that do not require an outlay of money by the firm

question

Financial capital invested is an

answer

opportunity cost

question

Economic Profit

answer

includes implicit costs into formula

question

Accounting Profit

answer

just the profit formula

question

Production Function

answer

the relationship between the quantity of inputs used to make a good and the quantity of output of that good

question

Marginal Product

answer

the increase in output that arises from an additional unit of input

question

Diminishing Marginal Product

answer

the property whereby the marginal product of an input declines as the quantity of the input increases

question

Total Cost Curve

answer

graph of the relationship between quantity produced and the total cost; with each additional unit, the total cost increases exponentially

question

Fixed costs

answer

costs that do not vary with the quantity of output produced

question

Variable Costs

answer

costs that vary with the quantity of output produced

question

Average Total Cost

answer

total cost/quantity of output

question

Average Fixed Cost

answer

fixed cost / quantity of output

question

Average Variable Cost

answer

variable cos / quantity of output

question

Marginal Cost

answer

change in total cost / change in quantity

question

Efficient Scale

answer

the quantity of output that minimizes ATC

question

The marginal cost cruve crosses the average cost curve at

answer

its minimum

question

Economies of Scale

answer

when long-run ATC falls as the Q of output increases

question

Diseconomies of Scale

answer

when long-run ATC rises as the Q of output increases

question

Constant returns to scale

answer

when long-run ATC doesn't change with Q

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Micro Chapter 12

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